The Canadian government is encountering resistance following its decision to exclude certain steel and aluminum imports from China and the U.S. from retaliatory tariffs. A recent order-in-council reveals that Ottawa has granted numerous Canadian companies exemptions to alleviate the burden of retaliatory tariffs on specific goods deemed essential or in short supply as per existing contracts.
The Canadian Steel Producers Association has expressed disappointment at the broad exemptions granted to American producers for an additional two months. The association’s CEO, Catherine Cobden, criticized the decision, particularly the exemptions extended to importers of Chinese steel, emphasizing that Canadian producers could readily replace such steel from the market.
In response to longstanding concerns from the steel industry regarding unfair trade practices by China, which led to a 25% tariff on Chinese aluminum and steel, Cobden urged the Canadian government to double the retaliatory tariff on American steel to align with the 50% tariff imposed by U.S. President Donald Trump on Canadian steel.
Ontario Premier Doug Ford recently urged Prime Minister Mark Carney to take a tougher stance against the U.S. following the relocation of Canadian Jeep production to the U.S. Carney, however, stated that retaliatory measures against the U.S. are not being considered amidst ongoing negotiations to secure relief for key sectors such as aluminum, steel, and energy.
Finance Minister François-Philippe Champagne described the exemptions as a means to support Canadian workers and families from negative impacts of countermeasures. International trade lawyer William Pellerin emphasized the significance of exemptions that allow Canadian manufacturers to import foreign steel or aluminum without incurring tariffs, thereby enhancing competitiveness and maintaining product prices.
While benefiting Canadian companies, the exemptions also assist Chinese and American manufacturers, though the exact trade value affected remains unclear. Pellerin noted that while the exemptions offer meaningful relief to Canadian firms on a case-by-case basis, they are unlikely to play a significant role in broader negotiations with the U.S.
Furthermore, the government extended exemptions for U.S. products used in food and beverage packaging and added a new exemption for agricultural production. Specific companies across Canada, such as Pizza Trucks of Canada and Pivotech Doors, received exemptions for importing essential goods without tariffs. Officials including Champagne, U.S. Trade Minister Dominic LeBlanc, and Canada’s top public servant Michael Sabia engaged in discussions in Washington to advance trade talks.